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Happy Labor Day: How To Bring A Trillion Dollars, And Policy Sanity, Back To America

$1.4 trillion are “stranded” overseas. Seventy-five Congresspeople, and growing, from both parties, respectfully led by freshman Representative John Delaney (D-Md), are advancing a plan to retrieve that money.

A million million dollars. $1.4 trillion is approximately seven times the value of the U.S. government’s gold held at the bullion depository inside Fort Knox. Liberating it would be something like a reverse Goldfinger “Operation Grand Slam” times seven. That’s … real money.

Will Congress do this? Some Democrats consider it heretical. Some Republicans are dragging their feet.

Yet its beginning to look like a real possibility. The political implications of doing it are even bigger than the trillion, plus or minus, dollars at stake.

Rep. John Delaney. Source: Wikipedia

This stranded trillion dollars are American corporate profits. Last time this columnist looked, capitalism remained legal in the United States. (It is not so legal in such advanced nations as Venezuela, to whose policies some of our progressives aspire notwithstanding Caracas’s struggle to keep even toilet paper in stock.)

The trillion is stranded offshore by America’s nosebleed nominal corporate tax rate. To be sure, “stranded” is used metaphorically. This money is not stashed in tomato cans in Ireland. It is banked. And because, as Prof. Robert Mundell taught us, the only closed economy is the world economy, the capital remains readily available, very much including to the US. A current accounts deficit axiomatically is equal to a capital accounts surplus. America obviously is running a massive capital accounts surplus. There’s no shortage of financing.

That said, our nosebleed corporate tax rate causes distortions and inefficiencies in the deployment of capital. This matters, microeconomically if not macroeconomically. Based on the reported enthusiasm of the rightful owners of this money, it looks like removing a big barrier to remitting it home is a big deal and a good thing.

Republicans (at least in theory) disapprove of the kind of “Somali Pirate policy” lunacy that is holding for ransom American corporate profits honestly earned abroad. All sane people ought to condemn such lunacy. Some on the left, however, take the position that Uncle Sam somehow is entitled to over a third of this money.

Meanwhile, back home, the federal government’s highway trust fund is going bust. Some of the (civil-engineer-graded C) bridges we drive across are at risk of collapsing. Aviation (D), dams (D) and drinking water systems (D-) reportedly are in sore disrepair.

The Congress, hocus pocus, last month made a couple of tweaks and used a sick accounting gimmick to keep highway funds flowing until next May. It’s at best a short term patch.

Democrats (at least in theory) disapprove of the “Enron Accounting policy” lunacy that is putting many of our roads, bridges and other public works — and, even, lives — at risk. All sane people should disapprove of such lunacy. Some on the right, however, appear truculent about federal involvement in infrastructure.

Disapproval, however, is cold comfort. Now … there appears to be a deal in sight.

It does not stick it to the taxpayers, as would, as some propose, raising the gas tax. It merely requires Congress to “think different.”

So “Who is John Delaney” and what is his solution? Delaney (who represents this columnist’s Maryland district) was first elected in 2012. He then was elected by his colleagues as president of the Democratic freshman class.

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Wonderful article! I’m voting for John K. Delaney Nov. 4th for reelection to the House of Representatives! He caught my attention because he is such a straightforward communicator as he vibrantly & eloquently interacts with all factions of the Maryland Sixth District. I like that he facilitates great accessibility and is omnipresence throughout his District. I also like his enthusiastic commitment to bipartisanship philosophy!